Understanding Patient Willingness to Pay

Published in eyeforpharma 12 October by Rachel Howard

What steps should pharma and medical device companies take to ensure they get their pricing strategy right in self-pay markets?

A key feature of emerging markets is that patients often have to self-fund a high proportion of their healthcare costs. For all but the most severe conditions, public reimbursement of pharmaceutical products and personal medical devices is often partial to non-existent, particularly in the outpatient setting. While private health insurance coverage is increasing in many emerging markets, penetration typically remains low, even among middle to high income segments of the population. This means that for many drugs and devices, the primary means of purchasing in emerging markets will be patients paying out of pocket. Any successful pricing strategy therefore needs to start with an understanding of target patients’ willingness to pay for the drug / device in question.In this article, I partner with Research Partnership Quantitative Director and pricing expert Duncan Munro to set out the critical success factors that should be considered in order to determine how a medical product should be priced in a self-pay market.